If you have Medicare Part B and/or Medicare Part D prescription drug coverage, you could owe a monthly surcharge based on an income related monthly adjustment amount (IRMAA). Here's a look at the IRMAA and what it may cost you.
The IRMAA is calculated on a sliding scale with five income brackets topping out at $500,000 and $750,000 for individual and joint filing, respectively. These figures change annually with inflation. IRMAA calculations have a two-year lag time. Whether you pay an IRMAA in 2024 depends on your 2022 tax returns.
You should be mindful of the risk of a one-time spike in income that could trigger the IRMAA. For instance, timing a Roth conversion properly, you can avoid the IRMAA when you convert and when you take distributions. Learn more about strategies such as how to lower taxes on required minimum distributions.
What is IRMAA?
IRMAA is a surcharge that people with income above a certain amount must pay in addition to their Medicare Part B and Part D premiums. IRMAA is calculated every year. That means if your income is higher or lower year after year, your IRMAA status can change. If the SSA determines you must pay an IRMAA, you’ll receive a notice with the new premium amount and the reason for their determination.
The Social Security Administration (SSA) determines who pays an IRMAA based on the income reported two years prior. So, the SSA looks at your 2022 tax returns to see if you must pay an IRMAA in 2024.
For 2024, beneficiaries whose 2022 income exceeded $103,000 (individual return) or $206,000 (joint return) will pay a total premium amount ranging from $244.60 to $594.00 depending on income.
It's easy to determine your 2024 Part B and Part D total premiums by adding the income-related monthly adjustment amount to the 2024 premium costs. For 2024, the Part B premium is $174.70 and the Part D is $55.50.
Income brackets and surcharge amounts for Part B and Part D IRMAA
For 2024, the income brackets for Part B and Part D are the same.
Here’s a chart explaining how income affects the Part B premium and Part D IRMAA:
The income adjustments for Medicare enrollees who are married and lived with their spouses at any time during the year, but who file separate tax returns from their spouses are steeper.
Here are the 2024 IRMAA amounts for married taxpayers that file separately:
Part B Coverage. For 2024, if your income is greater than $103,000 and less than $397,000 the IRMAA amount is $384.30. If income is greater than or equal to $397,000 the IRMAA is $419.30.
Medicare Part D. If your income is greater than $103,000 and less than $397,000, the IRMAA amount is $74.20. If income is greater than or equal to $397,000 the IRMAA amount is $81.00.
How to pay your Part B and Part D IRMAA
Part B IRMAA is automatically added to your monthly premium bill. While the Part D IRMAA must be paid directly to Medicare — not your plan or employer. It’s your responsibility to pay it even if your employer or a third party (e.g., retirement system) pays your Part D plan premiums. You’ll get a bill each month from Medicare for your Part D IRMAA and can pay it the same way you pay your Part B premiums.
All Medicare bills are due on the 25th of the month. In most cases, your premium is due the same month that you get the bill. If you miss a payment, or if Medicare gets your payment late, your next bill will also include a past due amount.
Here are four ways you can pay your Part B premium:
- Online through your secure Medicare account which is the fastest way to pay. Use this free service to pay by credit card, debit card, or from your checking or savings account. Use only your Medicare account to pay your bill. Don’t create or use a Pay.gov account to make your Medicare payment.
- Sign up for Medicare Easy Pay. With this free service, Medicare automatically deducts your premium payments from your savings or checking account each month. It can take up to 6-8 weeks for your automatic deductions to start. Until your automatic deductions start, you'll need to pay your premiums another way.
- Use your bank’s online bill payment service
- Mail your payment to Medicare. Pay by check, money order, credit card, or debit card. Fill out the payment coupon at the bottom of your bill, and include it with your payment. If you’re paying by credit or debit card, be sure to complete and sign the coupon. If you don’t have your payment coupon, write your Medicare Number on the check or money order. If you don’t sign the coupon, Medicare can’t process your payment and it will be returned to you. Use the return envelope that came with your bill, and mail your Medicare payment coupon and payment to: Medicare Premium Collection Center PO Box 790355 St. Louis, MO 63179-0355
How to request a new initial determination
The Social Security Administration (SSA) determines if you owe an IRMAA based on the income you reported on your IRS tax return two years prior, meaning two years before the year when you pay the IRMAA.
If Social Security determines that you should pay an IRMAA, they will mail you a notice called an initial determination. This notice should include information on how to request a new initial determination. A new initial determination is a revised decision that Social Security makes regarding your IRMAA.
To request a new initial determination, submit a Medicare IRMAA Life-Changing Event form or schedule an appointment with Social Security. You will need to provide documentation of either your correct income or of the life-changing event that caused your income to decrease.
Social Security considers any of the following situations to be life-changing events:
- Death of a spouse, marriage, divorce or annulment
- You or your spouse stopping work or reducing the number of hours you work
- Involuntary loss of income-producing property due to a natural disaster, disease, fraud, or other circumstances
- Loss of pension
- Receipt of settlement payment from a current or former employer due to the employer’s closure or bankruptcy
You can make the case that Social Security used outdated or incorrect information when calculating your IRMAA if you filed an amended tax return with the IRS or have a more recent tax return that shows you are receiving a lower income than previously reported.
Call SSA +1 800-772-1213 and tell the representative you want to lower your Medicare Income-Related Monthly Adjustment Amount (IRMAA) if you had an amended income tax return.
How to appeal an IRMAA
If you do not qualify to request a new initial determination, but you still disagree with Social Security’s decision, you have the right to appeal the IRMAA. Appealing an IRMAA decision is also referred to as requesting a reconsideration. Keep in mind that there are no strict time frames in which Social Security must respond to a reconsideration request. If you have questions about your appeal status, contact the agency currently reviewing your appeal.
If your reconsideration is denied, you can appeal to the Office of Medicare Hearings and Appeals (OMHA) level within 60 days of the date on the reconsideration denial.
